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Research Question/Issue: We study the relationship between family blockholding of voting rights and the relative size of international acquisitions, and the moderating effect of two types of financial blockholders (pressure-resistant and pressure-sensitive blockholders).Research Findings/Insights: Employing an international sample of 8,687 nonfinancial cross-border acquisitions conducted by 4,630 acquirer firms from 40 home markets to 66 host countries between 2004 and 2013, we find a U-shaped relationship between family blockholding of voting rights and the relative size of international acquisitions. Further, we find evidence that this relationship is moderated by the presence and type of financial blockholders. While pressure-resistant financial blockholders shift this relationship downwards (due to intensified conflicts), pressure-sensitive financial blockholders shift it upwards.Theoretical/Academic Implications: We contribute to the literature on family firm governance and internationalization on several fronts. First, we revisit the predominant logic of linear effects of the family blockholding. We suggest the family blockholding's effects are related to nonlinear risk preferences of family owners, expressed through SEW slack. Second, we suggest that the “dominant shareholder interest” assumption of family firms, usually based on the controlling family's SEW should be interpreted contingent upon the interests of other financial shareholders. Finally, using family-financial blockholder conflicts as the scenario, we suggest that principal-principal conflicts depend on the composition of the conflicting blockholders, specifically, upon the nature of their relations with the firm.Practitioner/Policy Implications: This study offers insights to policymakers and those interested in incentivizing family ownership that family owners’ risk behaviors should be understood and discussed in the context of different financial blockholders as a reference group.

Current research suggests that entrepreneurship in the family business context is mainly induced by top-down firm-level activity. We propose that entrepreneurial activity is also initiated autonomously as a bottom-up process by individual members or a group of individual members of an entrepreneurial family (EF). Building on 63 interviews with EF members involved in 39 venturing cases, we reveal a set of unique motives driving the venturing activity and show how these motives are intertwined with six heterogeneous family venture types. We also emphasize how positioning (i.e., inside or outside of family firms’ boundaries), family support, emotional attachment, and transgenerational intention vary among the different venture types.

Research often assumes that a controlling family’s social bonds contributes to superior firm performance. However, there is little theory to address these relationships and findings are often mixed. Here, we integrate resource-based and need-to-belong theories to address these issues, introducing family business potency as a key mediating variable between family cohesion, participative strategy processes, and firm performance in 109 family firms. Altogether, our study answers ongoing theoretical calls for more need-based psychological research in family firms, introduces family business potency to the literature, and contributes to research on family firm heterogeneity. Implications for future research and practice are also discussed.

In this introductory article for the special issue of Journal of Management Studies, entitled ‘Leading Entrepreneurial Ventures: Individual and Team‐Based Perspectives’, we leverage insights in the extant literature as well as those insights developed by the authors of the four articles published in response to our call for papers. Overall, we explore multiple nuanced questions with regards to research on entrepreneurship, research on leadership, and their intersection. Our goal is to begin to help guide research on entrepreneurship and leadership, and their intersection, for the next decade.

We investigate how the four dimensions of the dynamic capabilities (DC) construct (sensing, learning, integrating, and coordinating) individually affect firm performance and the moderating role of market orientation (MO) in the process. Our findings, based on a sample of 509 Spanish small- and medium-sized enterprises (SMEs), suggest that not all DC dimensions are equally important for SME performance. We further found MO to significantly moderate the relationships between both the sensing capability and the learning capability and firm performance. The implications for research and practice are discussed.

In family firms, the decision to voluntarily disclose individual supervisory board compensation induces confidence in the family firm's governance system, but may also compromise a family's efforts to keep exclusive control. Drawing on socioemotional wealth (SEW) research, we investigate family influence on a firm's voluntary disclosure decisions while distinguishing between different types of firms: non-family, true family (TFF), and lone founder firms (LFF). Our findings demonstrate the complex influence of two control-enhancing factors, family CEO and high ownership concentration, on disclosure decisions.

Goals represent an organization’s desired outcomes, and family businesses are known to pursue multiple goals, which commonly include both financial and non-financial aspects. While family business goals have garnered much attention among researchers, relatively little is known about the approaches that family businesses use to shape their idiosyncratic goal sets. The purpose of this article is twofold. First, we review the family business literature and synthesize the current knowledge regarding goal formation. Second, we incorporate insights from extant organizational goal literature and discuss various approaches (algorithms)—specifically, maximizing, satisficing, and optimizing—that family businesses may employ to select goals. These insights form the foundation for our discussion and recommendations for future research aimed at furthering the understanding of family business goal formation.

Research at the interface of corporate entrepreneurship (CE) and family firms’ domains has grown steadily based on the premise that family firms’ specific elements uniquely affect CE antecedents, strategies, and outcomes. However, much remains to be uncovered. In this article, we offer a theoretical advancement of a corporate entrepreneurship process model for the case of family firms organized around the categories of ontology (i.e., domain redefinition), epiphany (i.e., new components and mechanisms), and heterogeneity (i.e., family firm variety and contingencies). This development paves the way for an agenda for future research and for possible generalizations to non-family firms.

Research Question/Issue: We study the relationship between family blockholding of voting rights and the relative size of international acquisitions, and the moderating effect of two types of financial blockholders (pressure-resistant and pressure-sensitive blockholders). Research Findings/Insights: Employing an international sample of 8,687 nonfinancial cross-border acquisitions conducted by 4,630 acquirer firms from 40 home markets to 66 host countries between 2004 and 2013, we find a U-shaped relationship between family blockholding of voting rights and the relative size of international acquisitions. Further, we find evidence that this relationship is moderated by the presence and type of financial blockholders. While pressure-resistant financial blockholders shift this relationship downwards (due to intensified conflicts), pressure-sensitive financial blockholders shift it upwards. Theoretical/Academic Implications: We contribute to the literature on family firm governance and internationalization on several fronts. First, we revisit the predominant logic of linear effects of the family blockholding. We suggest the family blockholding’s effects are related to nonlinear risk preferences of family owners, expressed through SEW slack. Second, we suggest that the “dominant shareholder interest” assumption of family firms, usually based on the controlling family’s SEW should be interpreted contingent upon the interests of other financial shareholders. Finally, using family-financial blockholder conflicts as the scenario, we suggest that principal-principal conflicts depend on the composition of the conflicting blockholders, specifically, upon the nature of their relations with the firm. Practitioner/Policy Implications: This study offers insights to policymakers and those interested in incentivizing family ownership that family owners’ risk behaviors should be understood and discussed in the context of different financial blockholders as a reference group.

Despite evidence pointing to differences between family and nonfamily firms regarding entrepreneurial orientation (EO), market orientation (MO), and learning orientation (LO), little is known of the relationships between these variables in the family business context. Drawing on the resource-based view (RBV) and a sample of 509 Spanish small and medium enterprises (SMEs), our results suggest that the family business context promotes the LO-EO link, which helps explain why some firms are more entrepreneurially oriented than other firms.

This study investigates the effect of family characteristics on the internationalization activities of Chinese family small and medium-sized enterprises (SMEs) using a socioemotional wealth perspective. We suggest that family ownership negatively affects international expansion. Results using a sample of 1542 Chinese family SMEs support our hypothesis that there is a negative relationship between family ownership and international activities. Due to mixed findings in previous studies, we not only focus on both export intensity and export propensity, but also introduce family firm characteristics (i.e., presence of founder CEOs and family succession intention) as moderators. We argue that these moderators capture a temporal aspect of socioemotional wealth (SEW) and find that they strengthen the negative relationship between family ownership and internationalization. Our study contributes to family firm internationalization research by disentangling the relationship between family firm characteristics and internationalization, as well as SEW research.

How do entrepreneurs fill institutional voids that prevail in emerging markets? By incorporating insights from both the political and family embeddedness perspectives, we argue that both political ties and family ties can compensate for gaps in the institutional infrastructure of emerging markets. Specifically, we propose and examine the partial substitutability of family ties for political ties as a means of filling institutional voids. Our empirical work based on Chinese private enterprises strongly supports this argument. We also find that the effective utilization of family ties is contingent on both family members’ motivation (willingness to use resources for the firm) and entrepreneurs’ mobilization (authority in the family to mobilize family members). This study bridges the literature on political ties and family ties to understand their respective costs and benefits and therefore advances our understanding of entrepreneurs’ networking strategies in emerging markets.

Organizational learning can be a key shared value that perpetuates the family's and the family firm's culture across generations. Imprinting theory helps to explain the impact that lessons learned and transmitted can have on the development of human resources in the family firm. However, the results of imprinting may not necessarily be positive, particularly when imprinting manifests itself in negative processes and expectations. Whereas imprinting and organizational learning are often associated with a “positive halo effect,” they have the potential to result in negative behaviors and deleterious firm-level outcomes. Employing imprinting theory as a framework, we highlight the potential dark side of imprinting within the family firm context and how it can damage human resource efforts and threaten company performance and firm survival. Finally, we suggest how bad habits may be broken and replaced with more effective routines so as to ensure the family firm's continuity and success.

Goals are a key differentiator between family businesses and non‐family businesses. To improve understanding of this topic, the authors take stock of what they know about goals in family business. They synthesize prior research findings and classify the research into five categories: family business goal antecedents; goal characteristics; goal‐related outcomes; moderators of goal outcomes; and feedback loop. The paper concludes by highlighting future research to advance both family business goal and general management research.

The influence of the industrial sector is a long-standing assumption in entrepreneurship studies, yet the mechanisms through which the industrial sector shapes entrepreneurial phenomena and the processes through which entrepreneurial actors interact with sectors to prospect, develop, and exploit entrepreneurial opportunities remain largely under-theorized and little understood. We critically reexamine the notion of “sector” in entrepreneurship research, advancing a more dynamic view of the industrial sectors captured by the concept of sector fluidity and identifying three approaches to move the sector more prominently onto the “front seat” of entrepreneurship theory and research. Defining sector-based entrepreneurial capabilities and examining their importance to advance current understanding of industry-specific determinants, processes, and outcomes of entrepreneurship, we set out an agenda for further research aimed at advancing sector studies in entrepreneurship.

Upper echelon theory highlights the importance of top management teams in large and established firms; however, effects are not always clear outside of this context. Due to the unique nature of new ventures, the composition of entrepreneurial teams and its effects on performance is worthy of investigation. Accordingly, we meta–analyze the effect of three characteristics of entrepreneurial team composition (i.e., aggregated, heterogeneity, team size) on new venture performance. Our meta–analysis, which includes 55 empirical samples and 8,892 observations, finds significant and unique effects of entrepreneurial team characteristics on new ventures. Based on our findings, we derive avenues for future research.

This article theoretically and empirically intertwines agency and stewardship theories to examine their distinct and combined influences on family firms. Primary matched triadic data from CEOs, family employees, and nonfamily employees in 77 family firms suggest that agency and stewardship governance affects individual-level behavior and firm-level performance. Specifically, agent behavior is highest under conditions of coexisting low agency governance and high stewardship governance and is lowest when agency and stewardship governance coexist at high levels. Furthermore, when high levels of agency and stewardship governance coexist, family firm performance is the highest. Theoretical implications and future research directions are discussed.

In a study of family firms that included survey responses from both family CEOs and family member employees, we examined the roles that collaboration and CEO monitoring play regarding the prevalence of extra-role behavior, an important human resource outcome that can impact job performance and firm performance. Results indicated that an integration of stewardship and agency theories (manifested through interactions between family harmony and adaptability with monitoring) helps explain the level of extra-role behavior displayed by family employees. The findings lend some support for the argument that effective human resource practices in family firms should be balanced between instrumental governance mechanisms that reflect a monitoring approach and normative mechanisms that focus on collaborative efforts among family employees. When this balance is achieved, an environment of fairness and accountability rather than a tone of distrust and forced compliance may prevail in family firms, thus addressing a key human resource issue in this hybrid form of organization. © 2017 Wiley Periodicals, Inc.

PurposeThe purpose of this paper is to examine the differential effects of workplace stress and the use of social support by contingent vs standard employees.Design/methodology/approachConservation of resources (COR) theory is used to frame research questions. Using content analysis of 40 interviews from individuals in the hospitality industry, differences between the levels of stress reported by contingent and standard employees as well as differences in their use of social support networks to offset stress is examined.FindingsContingent employees report experiencing more stress than do standard employees in the same profession. Furthermore, contingent employees seek out more social support than do standard employees. There was no difference between the two groups with respect to the desire for social support from three sources: vertical, horizontal, and customer groups.Originality/valueThis study extends the literature on contingent workers, the literature on how different types of employees deal with stress, as well as adding to the COR literature by showing that contingent employees experience and assuage their stress differently than do standard employees.

Over the last decades, human resource management has received increasing attention in family business scholarship. However, works on human resource management in the context of family firms remain relatively low as compared to the more general body of studies on human resource management. This article introduces our special issue of the German Journal of Human Resource Management, which discusses facets of how family firms configure human resource management and set human resource practices. We first give a brief overview on the conceptual and empirical research that relates to and informs human resource management within family firms, resulting in a human resource system framework. We then discuss ideas for future human resource management research, namely, the influence of the owning family on human resource orientation, non-family employees as human resource recipients and the role of human resource professionals in delivering human resource management. Furthermore, we call for making psychological foundations part of the human resource management scholarship agenda. There is still work to be done before human resource management can find its ‘place in the sun’ in the family business community. Hence, this special issue contributes to developing family business human resource management scholarship further by offering the human resource system framework, by suggesting directions for future research and by advancing our conceptual and empirical understanding of human resource management in the context of family firms.

In making a decision to enter into a long–term employment relationship with a firm, job seekers often compare their needs and values with the perceived organizational characteristics of the firm. In the case of family firms, the communication of family influence can be a unique factor in shaping beliefs about firm attributes. Family influence is often associated with trustworthiness, security, and stability. However, family influence is also associated with inflexibility and resistance to change. Using the idea of person–organization fit, we hypothesize that although family influence attracts job seekers in general, applicants who value conservation or self–transcendence are particularly attracted, while applicants who emphasize openness to change or self–enhancement are less attracted. Furthermore, we propose that the attractive effects of family influence are more pronounced in more hostile economic environments. We find evidence for our hypotheses using a conjoint experiment and 5,600 assessments of family influence nested within 175 job seekers.

In this paper we investigate private equity firm perceptions of sellers’ affective deal commitment in buyout transactions. Using a sample of 174 buyouts, we test trust, goal congruence and private equity reputation as potential antecedents of perceived deal commitment. We also examine whether and how different types of sellers, family versus non-family firms, moderate sources of perceived affective deal commitment. In sum, we find evidence that non-financial factors play a role in buyouts, particularly for family firm sellers.

Buyouts are the main investment route for private equity (PE) firms and negotiations are required to reach an agreement with current owners as to how to form a new corporate entity (Meuleman et al., 2009). The negotiation of buyouts is extraordinary complex, given the number of financial, tax, and legal issues which need to be resolved between the negotiating parties (Reed et al., 2007; Cumming & Johan, 2009).

This study investigates turnover intentions of different groups of non-family employees in family-owned firms and non-family-owned firms. Raising the question for whom are family-owned firms good employers, we add to the debate on their employer-qualities. Building on job embeddedness theory, we underline the importance of differentiating groups of non-family employees when analyzing their turnover intentions in the family and non-family business context. We focus on the differences among and between blue-collar workers and white-collar workers with and without leadership responsibility and find that turnover intentions of blue-collar workers with leadership responsibility are lower when they are employed in family-owned firms. We observe an opposing trend for white-collar workers with leadership responsibility, who show higher turnover intentions when they are employed in family-owned firms.

Advancing the literature on Private Equity (PE) buyout negotiations and family-business decision making, we theorize and empirically confirm that sources of bargaining power (i.e., PE expertise advantage and seller's time pressure) interact differently with perceived PE bargaining power, depending upon whether the seller is a family or a non-family business. Additionally, we demonstrate that, for family businesses with an increased family team complexity, the effect of bidder competition becomes weaker, whereas the relationship of PE expertise advantage on PE bargaining power becomes stronger. Hence, team complexity reduces a family business' decision power and increases a PE's comparative bargaining advantages. These findings contribute to several research streams: first, to that of family businesses by advancing knowledge on heterogeneity, operationalized as team complexity, that negatively affects a family business' bargaining power; second, to that on PE buyouts, with a finding that a PE firm's bargaining power differs significantly depending upon the type of seller (family vs. non-family business) due to a family business' unique socio-emotional wealth considerations; and third, to the general strategic management literature on upper echelons and top-management teams (TMT), with a finding that team complexity reduces the family business teams' behavioral integration and hence its ability to use potential bargaining advantages.

Agency and stewardship theories are prominent perspectives to examine myriad issues within family firms. Although considered opposing theories, both address the same phenomena: the individual-level behaviors and firm-level governance mechanisms that predict organizational outcomes. Accordingly, we review and synthesize these theories concurrently, using the concepts of behavior and governance as our organizing framework. Our review encompasses 107 family firm articles grounded in agency and/or stewardship theory, published between 2000 and 2014 in 24 journals across several disciplines. Additionally, we identify future research areas that provide scholars opportunities to push theoretical boundaries and offer further insights into the family firm.

Understanding the adoption and use of technology is extremely important in the field of information systems. Not surprisingly, there are several conceptual models that attempt to explain how and wh...

Nearly half of the population in Africa lives on less than $1.25 per day in what scholars refer to as base-of-the-pyramid (BOP) markets. More broadly, BOP markets account for two billion of the world's population living in extreme poverty. Household enterprises, a dominant organizational form in BOP markets, draw upon significant levels of family involvement. In order to cope with poverty, the involvement often includes inputs from elderly to young family members. Yet, we have little understanding of how family embeddedness influences household enterprise outcomes in BOP markets. The article presents a model that explains how the institutional environments with BOP markets influence family embeddedness in the household enterprise, and how family embeddedness influences household enterprises’ poverty-related outcomes (i.e., subsistence and child well-being). It also examines how household enterprises can draw upon income diversification strategies to reduce their vulnerability to poverty. The theory presen...

An increasing number of families are selling their businesses to private equity (PE) investors. A key question is what the family firm is worth without the family as part of the business. We provide a buyers’ perspective on the valuation of the family firm and argue that prior family involvement provides the PE buyer with a distinct landscape of real options that require consideration. While the buyer gains real options for external (economic) value creation as a result of family departure, family exit after the sale triggers a loss of family dependent real options, which may subsequently reduce economic value for the new owner. Consequently, these two opposing effects need to be considered when accounting for the central role of the family and whether these effects result in an increased or decreased valuation of family firms.

Although upper echelon literature has found evidence for the effect of executives’ characteristics on firm strategy such as the level of research and development (R&D) intensity, research on how different behaviors, values, personalities, motivations, and experiences of executives influence the R&D intensity of small and medium-sized firms is scarce. Applying upper echelon theory, this study uses firm growth (sales and employee growth) as a contingency factor to analyze variations in the effect of chief executive officer (CEO) innovation orientation on R&D intensity in small and medium-sized firms. As research on the direct effect of firm growth on R&D intensity is inconclusive, this study applies firm growth as an indirect effect to show whether the impact of CEO innovation orientation on R&D intensity differs in times of low growth compared to times of high growth in small and medium-sized firms. Using a sample of 77 German CEOs of small and medium-sized firms operating in manufacturing industries, results show that CEO innovation orientation has a positive effect on R&D intensity, and firm growth affects this relationship. Specifically, high CEO innovation orientation has a positive effect on R&D intensity in firms with low growth, while its impact disappears in firms that experience strong growth. Implications and future research are discussed.

Although enterprise systems (ES) are ubiquitous, many firms report less than stellar payoffs from these costly investments, with underutilization often attributed to failures in the implementation process. Unfortunately, research has not provided sufficient insights into these failures, in part because it has focused on actual usage, as opposed to proficient usage, as the benchmark for successful implementation. Moreover, research has not generally examined how the adoption process unfolds over time, thus overlooking potential underlying mechanisms that may help explain how adopters achieve proficiency. To begin addressing these shortcomings, we study how adopters’ pre-adoption expectations, enacted over time, can influence their post-adoption proficiency, by shaping how and why they spend time using the system during the adoption period. We analyzed time-lagged survey data from 153 financial analysts, required to adopt new ES-based software, at a multinational bank. We found that adopters who hold pre-adoption expectations reflecting greater internal and external motives to adopt the system as well as systematically integrate it into their work routines are more apt to use the system in ways that enhance their cumulative knowledge of it, and subsequently develop higher levels of proficiency post-adoption. Moreover, greater organizational support enhanced the impact of adopters’ expectations on proficiency, except when their actual use is low in which case organizational support had an adverse effect.

The resource‐based view () is one of the most influential perspectives in the organizational sciences. Although entrepreneurship researchers are increasingly leveraging the tenets, it emerged in st...

Investigating the new product portfolio innovativeness of family firms connects two important topics that have recently received considerable attention in innovation and family firm research. First, new product portfolio innovativeness has been identified as a critical determinant of firm performance. Second, research on family firms has focused on the questions of if and why family firms are more or less innovative than other organizational forms. Research investigating the innovativeness of family firms has often applied a risk-oriented perspective by identifying socioemotional wealth (SEW) as the main reference that determines firm behavior. Thus, prior research has mainly focused on the organizational context to predict innovation-related family firm behavior and neglected the impact of preferences and the behavior of the chief executive officer (CEO), which have both been shown to affect firm outcomes. Hence, this study aims to extend the previous research by introducing the CEO's disposition to organizational context variables to explain the new product portfolio innovativeness of small and medium-sized family firms. Specifically, this study explores how the organizational context (i.e., ownership by top management team [TMT] family members and generation in charge of the family firm) of family firms interacts with CEO risk-taking propensity to affect new product portfolio innovativeness. Using a sample of 114 German CEOs of small and medium-sized family firms operating in manufacturing industries, the results show that CEO risk-taking propensity has a positive effect on new product portfolio innovativeness. Moreover, the analyses show that the organizational context of family firms impacts the relationship between CEO risk-taking propensity and new product portfolio innovativeness. Specifically, the relationship between CEO risk-taking propensity and new product portfolio innovativeness is weaker if levels of ownership by TMT family members are high (high SEW). Additionally, the effect of CEO risk-taking propensity on new product portfolio innovativeness is stronger in family firms at earlier generational stages (high SEW). This result suggests that if SEW is a strong reference, family firm-specific characteristics can affect individual dispositions and, in turn, the behaviors of executives. Therefore, this study helps extend the knowledge on the determinants of new product portfolio innovativeness of family firms by considering an individual CEO preference and the organizational context variables of family firms simultaneously.

This study investigates the relationship between top management team (TMT) innovation orientation and new product portfolio performance in small and medium-sized family firms by exploring two family firm-specific sources of TMT diversity as moderators: the number of generations involved in the TMT and the ratio of family members in the TMT. Results indicate that family-induced diversity in the TMT has opposing moderating effects. Although a positive relationship exists between TMT innovation orientation and new product portfolio performance when multiple generations are involved in the TMT, TMT innovation orientation and new product portfolio performance experience a negative relationship when the ratio of family members in the TMT is high. The study discusses theoretical and managerial implications of the findings and develops avenues for future research.

This article highlights the need for network-related research in family business. It provides a concise review of network related constructs and shows potential applications for family business research. It further highlights issues related to data collection and analysis. The article concludes with examples of how network research may extend recent studies and provides an agenda for future research.

Adapting the theory of planned behavior to the area of financial choices in family firms, we argue that these choices in family firms are largely affected by family norms, attitude, perceived behavioral control, and behavioral intentions. A time-lagged sample, estimated via structural equation modeling of 118 German family firms, supports a behavioral approach to the study of financing decisions. Specifically, we show that family norms and attitude toward external debt and external equity affect behavioral intention to use the respective financing choices, which in turn affects financing behavior. Perceived behavioral control, however, was shown to negatively affect behavioral intentions to use external equity and was positively related to the use of internal funds. Implications of these capital structure decisions and ideas for future research are discussed.

This study examines the contingent effect of the degree of exploration characterizing strategic initiatives on the relationship between group-level organizational learning activities (i.e., searching, processing, codifying, and practicing) and the performance of strategic initiatives. Results from a sample of 96 strategic initiatives conducted by three large European insurance corporations provide broad, albeit not unanimous, support for our prediction that the four learning activities are more beneficial when the degree of exploration is high. Moreover, for initiatives with lower degrees of exploration, we found no significant association of searching, processing, codifying, or practicing with initiative performance. These findings suggest that effective organizational learning depends not only on investments in learning activities, but also on the alignment between these investments and the degree of exploration inherent in the learning task.

Applying insights from the generational perspective, this study explores when strategic planning and succession planning are most conducive to privately held family firm growth. The results show that the degree to which strategic planning and succession planning are associated with family firm growth depends on the generation managing the firm. Both forms of planning are most conducive to the growth of first-generation firms; however, neither form of planning confers much growth for second-generation firms. For third-and-beyond-generation firms, the benefits of succession planning appear to reemerge. However, strategic planning is negatively associated with their level of growth. [ABSTRACT FROM AUTHOR]

Family owned and managed firms represent a large proportion of businesses operating domestically and globally. Dynamics introduced by family members can develop into significant problems for the family-owned firm, and have far-reaching implications for its performance. One challenge entails coping with a family member employee who, for various reasons, behaves in ways that have toxic and damaging effects on the business. We label this phenomenon ‘the Fredo effect,’ referencing the incompetent brother from The Godfather books and movies. Herein, we discuss the Fredo effect in a family firm context, why the Fredo effect is unique to family firms, and how the effect develops over time in family relationships. We further analyze how the Fredo effect hurts family firms in terms of leadership succession and performance, and what family firm leaders can do to address it.

This study investigates how family commitment moderates whether and how financial knowledge, positive experience with debt suppliers, and economic goal orientation affect owner-managers' attitudes toward debt financing in family firms. Using a sample of 280 German family firms, we find significant relationships between both financial knowledge and positive experience with debt suppliers and owner-managers' financial attitudes toward debt. Our findings show that family commitment moderates these relationships such that high family commitment increases the impact of prior experience with debt suppliers, while the effect of economic goal orientation is lowered and reversed. Overall, we contribute to research on financial decision making, capital structure and social capital in family firms.

Through its rapid growth during the past decade, family business research has reached its adolescence as a field of study, and family business scholars now regularly contribute interesting and thought-provoking work to top-tier management, entrepreneurship, and finance journals. In this review article, the authors seek to document the growing maturity of family business research and to promote its integration into broader streams of inquiry in the organizational sciences. To do so, the authors describe recent family business research that addresses two fundamental questions: “How do firms differ in terms of their financial performance?” and “How do institutional conditions moderate performance differences between firms?” Based on their review, the authors describe the past and potential future contributions of family business research and conclude that it holds great promise to “give back” and provide meaningful contributions to the general field of management.

This paper develops a framework for future family firm research based on the types of family entrepreneurs, process of opportunity recognition, type of organization, environment and interactions among the aforementioned elements. In addition, future research on both economic and non-economic outcome variables is discussed. We conclude with a discussion intended to help facilitating family firm publications.